buildings and aim to achieve the EU climate change mitigation objectives within Member States.
83 Trotta et.al ResearchGate 2017, p.12.
84 TFEU, Article 4.2.i.
85 Single European Act (SEA), signed in Luxembourg on 17 February 1986.
86 Jegen, International journal 2011, p.81.
87 COM/2016/0765 final, p.15.
88Treaty on European Union
89 Parejo-Navajas, Seattle J. Envtl. L 2015, p.375.
90 Parejo-Navajas, Seattle J. Envtl. L 2015, p.375.
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These are EED (Directive 2012/27/EU),91 and EPBD (Directive 2010/31/EU) as discussed in the following sections.92
The EED recast (2012) was developed with the primary objective “to establish a common framework of measures for the promotion of energy efficiency”93 repealing and merging two directives on energy efficiency to ensure that opportunities for improvements are addressed.94 Its legal basis is Article 194 TFEUbased on shared competences between the EU and its Member States.95 The EED was intended to help achieve the target of 20% primary energy savings in 2020,96 offer a direct response to increased dependence on energy imports, climate change mitigation initiatives, and ensuring energy security97 within the EU Member States.98 It is well understood as a key policy instrument to decrease energy consumption of EU buildings and
“convert national building stocks from energy consumers to energy producers.”99 Member States had a mandate to transpose the directive within 18 months of entry into force as laid in Article 28.
The EED set out key obligations to Member States to promote energy efficiency to reach the 20%
headline target and to pave the way for a long-term strategy for further energy efficiency improvements beyond 2020.100 As one of the most important pieces of legislation in European energy law,101 the directive provides “clear legal framework that is necessary to put energy efficiency at the heart of energy policy.”102 The EED demonstrates that climate change is an energy
91 Directive 2012/27/EU.
92 Directive 2010/31/EU. A recast of Directive 2002/91/EC. See, Dawes Environmental Law Review 2010, p.267.
93 EED Article 1(1).
94 The repealing of former directives raised improvements in raising the 2020 ambition and ensure energy efficiency within the EU Member States. Directive 2012/27/EU, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC, (2012] OJ L 315/1.
95 Schiavo Maastricht J. Eur. & Comp 2013, p.323.
96 COM (2008) 30 final.
97Burman Energy 2014, p.154.
98 Burman Energy 2014, p.153.
99 D’Agostino Energies 2017, p.117.
100 EED, Article 1(1).
101 Schiavo Maastricht J. Eur. & Comp 2013, p.323.
102 Eusterfeldhaus Journal of Energy & Natural Resources Law 2011. p.465.
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related threat that can be addressed through energy efficiency of buildings103 hence through the energy efficiency targets outlined in Article 3 it directly aims “to reduce energy consumption, with associated reductions in both GHG and conventional pollution.”104 The directive mandates Member States to “use energy more efficiently at all stages of the energy chain, from production to final consumption”105 in various sectors of the economy to promote smart use of energy.106 The EED promotes the reduction of “energy demand compared to the business-as-usual pathway where energy demand is rising rapidly” within the EU and globally as a result of rapid industrialization and urbanization in particular.107 The indicative national energy efficiency targets outlined in Article 3 is a major development to ensure that Member States prioritizes energy efficiency and abide to the set targets and goals as enforced by the infringement procedure. The idea of setting targets for which Member States must develop plans and measures to achieve national compliance is quite common in EU environmental law, as in the field of air and water legislation108 but has been criticized for being problematic to enforce.109
The EED has key Articles110 and measures on energy efficiency promotion which are directly linked to buildings. Some Articles have cross-sectoral level coverage with great relevance to energy efficiency of buildings.111 Although the EED is a cross sectoral instrument, this section will
103 Directive 2012/27/EU. See Preamble.
104 Sachs Vanderbilt Law Review 2012, p.1638.
105 ec.europa.eu/energy/en/ Section Energy Efficiency Directive.
106 Schiavo Maastricht J. Eur. & Comp 2013, p.323.
107 Sachs Vanderbilt Law Review 2012, p.1642.
108 COM (2012) 714 final, 10-1.
109Schiavo Maastricht J. Eur. & Comp 2013, p.325.
110 These include, buildings renovation (Article 4), public buildings renovation and public procurement of energy-efficient materials (Articles 5 and 6), energy efficiency obligation schemes (Article 7.), energy audits and energy management systems (Article 8.), metering and billing obligations (Article 9 and 10) and cost benefit analysis obligations (Article 10(3).
111 The EED presents 11 Articles with cross-sectoral level coverage, with great relevance to buildings: Article 7, Article 8, Articles 9, 10, 11), consumer information and training Articles 12 and 17, qualification, accreditation and certification schemes (Article 6), energy services (Article 18), other measures to promote energy efficiency (Article 19), and energy efficiency national fund, financing and technical support (Article 20). See, Economidou et al. 2016, p.10.
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address the main components of the directive which is applicable to energy efficiency of buildings.
The focus will be on renovations and energy usage by public buildings, energy efficiency supply obligations, efficiency in energy use, (national plans for efficient cogeneration, heating, and cooling112) and horizontal provisions which are geared to drive GHG emissions.
3.2.1 Public buildings
Public buildings renovation is an important driver in reducing GHG emissions from the EU113 given the special role of the public sector in owning a considerable share of the total building stock.114 The higher visibility of public buildings in public life gives the public sector greater responsibilities for meeting the energy efficiency of buildings targets in future.115 The directive focuses on the EU’s long-term strategy on energy efficiency of buildings that addresses cost-effective renovations and procurement of energy-efficient materials of the existing public buildings primarily in Articles 4, 5 and 6. The obligation to renovate central government buildings complements Directive 2010/31/EU, “which promotes the improvement on the energy performance of buildings within the Union, taking into account outdoor climatic and local conditions, as well as indoor climate requirements and cost-effectiveness”.116
Member States have an obligation to renovate 3% of public bodies buildings per year (3% of total useful floor area over 500 m2 and lowered to over 250 m2 as of 9 July 2015) showing that the public sector has a responsibility to lead by example (Article 5). The public sector is, “an important driver to stimulate market transformation towards more efficient products, buildings and services, as well as to trigger behavioural changes in energy consumption by citizens and enterprises”.117 The mandate also extends to the procurement of products, services and buildings with high energy-efficiency performance which is a sound condition to ensure energy savings and promote energy
112 Report of the international energy law transactions committee, Energy Law Journal 2012, p.296.
113 Schiavo Maastricht J. Eur. & Comp 2013, p.325.
114 Schiavo Maastricht J. Eur. & Comp 2013, p.325.
115 Directive 2012/27/EU, Recital 17.
116 Parejo-Navajas, Seattle J. Envtl. L 2015, p.384.
117 Directive 2012/27/EU, Recital 15.
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efficiency (Article 6 (1) as recommended in Annex III). To ensure public accountability and transparency, “public bodies are required to publish an inventory of buildings they own, the floor area of each building and the energy performance of each building”.118 One limitation of the procurement provision is the existence of the purchase threshold established in Article 7 of Directive 2004/18/EC.119 The threshold hinders efforts of far-reaching energy efficiency since procurement obligations cannot be enforced for procurements below the stipulated threshold of EUR 162 000.
Article 4 obliges Member States to mobilize investments of the renovation of the national building stock. Cost-effective approaches to renovations and “evidence-based estimates at expected energy savings and wider benefits”120 should be taken into consideration.121 The obligation to renovate central government buildings complements Directive 2010/31/EU that “promotes the improvement on the energy performance of buildings within the Union, taking into account outdoor climatic and local conditions, as well as indoor climate requirements and cost-effectiveness.”122
3.2.2 Energy efficiency obligation schemes, audits and energy management systems
The EED introduces measures to be undertaken by Member States and utility companies for improving energy efficiency and reducing dependency on oil and gas imports by creating an energy efficiency obligation requirement in Article 7. The ways in which these measures are implemented
“are left to the discretion of the Member States.”123 With the energy savings or reduction obligation to 1.5% per year, the Article lays great responsibility for utility companies (energy distributors or
118 Directive 2012/27/EU, Article 5 (5), See, Report of the international energy law transactions committee, Energy Law Journal 2012, p.298.
119 Directive 2004/18/EC, Article 7.
120 Stefan The Coalition for Energy Savings 2013.
121 Directive 2012/27/EU, Article 1.
122 Parejo-Navajas, Seattle J. Envtl. L 2015, p.384.
123 Crowhurst Environmental Law Review 2012, p.299.
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retail energy sales) to be major players in reducing the customers’ energy use of buildings and other sectors of the economy. They have control of the infrastructure and customer base which is important to GHG emissions. In this context, the utility companies are turned into service companies rather than simply sellers of energy124 thus introducing legal obligations that make utility companies key players in the energy efficiency game.
Article 8 outlines the obligations to implement energy audits125 and energy management systems to be carried after every 3 years. The audits are a critical part of checking progress of goals set towards achieving the broader goals by 2020. Energy audits and management system tools provides additional measures for reducing end-user energy by providing consumers with the necessary information and tools to make more energy efficient decisions. Providing customers with their energy usage information have a potential to encourage a change of behaviour towards energy savings. Energy audits are “used to identify, quantify and report existing energy consumption profiles and energy savings opportunities in buildings, industrial or commercial operations or installations, and in private or public services.”126 The directive requires mandatory and regular energy audits for large enterprises, as they can provide significant energy saving opportunities.127 Energy auditing is an important aspect that identifies cost-effective energy improvements and helps in the process improvements and operational changes that promote energy savings.128 The benefits are far-reaching, the study of how energy is currently being used in a specific building will generate a series of recommendations of ways to improve its energy efficiency and energy cost.129 The realization of the EED objectives can be achieved by ensuring the capturing and provision of comprehensive and significant building data that support energy
124 Crowhurst Environmental Law Review 2012, p.300.
125These are systematic procedures “conducted to gain adequate knowledge of the existing energy consumption profile
of a building or group of buildings, an industrial or commercial operation or installation or a private or public service, identifying and quantifying cost-effective energy savings opportunities, and reporting the findings”. See, Nikolaou et al.. Advances in Building Energy Research 2011, p. 53-70.
126 Directive 2012/27/EU recital 24.
127 Directive 2012/27/EU recital 24.
128 Parejo-Navajas, Seattle J. Envtl. L 2015, p.363.
129 Parejo-Navajas, Seattle J. Envtl. L 2015, p.363.
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efficiency components. Such information can be used to promote and demonstrate new options on the future energy savings legislation.130
The EED also presents its challenges to delivering expected results and outcomes based on the auditing system. The legal arrangements presented in the directive do not efficiently foster an appropriate auditing system to increase energy efficiency uptake in Member States131 and this is true considering that the Commission always leaves such discretions and responsibilities to the Member States. This approach has been criticized for creating irregular statistical data onto the energy performance of buildings and related indicators in most EU countries which is one of the challenges to be addressed in relation to audits.132 Compliance and enforcement of the EED building related regulations remains a key issue in many EU countries even though such efforts are essential to deliver the full potential for energy efficiency savings.133 The European Commission can open an infringement procedure to enforce compliance and Spain has been recently sent a letter of formal notice to comply with the installation of individual meters or heat cost allocators to measure energy consumption in multi-apartment and multi-purpose buildings.134
3.2.3 Promotion of efficiency in heating and cooling
The Directive places emphasis on the promotion of high efficiency and more inclusive co-generation of heat to promote efficiency in heating and cooling as outlined in Article 14. This is a critical provision for promoting energy efficiency of buildings through stringent cogeneration procedures. The cogeneration efficiency should be carried out in the scope of national potentials for high-efficiency cogeneration under Directive 2004/8/EC (Article 14.1) and authorization criteria outlined in Article 7 of Directive 2009/72/EC or equivalent permit as outlined in Article 14.7. This also emphasized on the interconnectedness of EU Environmental and Climate Change legislation. In the operation of heating districts and cooling networks, the directive obliges Member
130 Parejo-Navajas, Seattle J. Envtl. L 2015, p.363.
131 Schiavo Maastricht J. Eur. & Comp 2013, p.326.
132 Nikolaou et al.. Advances in Building Energy Research 2011, p.53-70.
133 Klinckenberg et al.. Klinckenberg Consultants 2006.
134 europa.eu/rapid Section October Infringements Package: Key Decisions.
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States to control CO₂ produced during the combustion process at the source. The provision falls short on focusing more on obligation to carry out a cost-benefit analysis (CBA) on cogeneration rather than an obligation to co-generation to reduce energy consumption of Member States. The CBA observes the climate conditions, Member States’ economic feasibility and technical suitability as outlined in Part 1 of Annex IX (Article 14.3). The cogeneration obligations are strengthened by other legislation measures indicating that it is not a standalone provision.
3.2.4 Metering and Billing
The EU is harnessing information disclosure obligations as part of demand reduction that promotes efficiency of energy end users.135 Information disclosure is an important aspect of the EED focusing on the energy usage outcomes and subsequently promoting energy efficiency in buildings. The directive promotes the consumers’ decisions guided by the availability of information on energy savings which should be publicly made available. As such more information on metering and billing should be provided to the consumers as covered in Articles 9-11 with the sole purpose to enhance significant positive changes in energy usage and decision making in equipment purchasing. Buildings should have individual metering installations for all energy installations including district heating, cooling and district-supplied domestic hot water. The provisions require metering readings to be accurate, based on actual consumption and sent to customers electronically or as paper bills. Electricity generators and suppliers are obliged to invest in consumer information campaigns or trainings. Each Member State is required to provide information on measures promoting behavioural change of small energy consumers.136 One major limitation of information based behavioural change is that the approach cannot guarantee energy savings. The savings will ultimately depend on the users’ discretion and behaviour. The EU ensures that Member States adheres to the obligations and impose penalties that are, “effective, proportionate and dissuasive” in the event of non-adherence by energy suppliers and energy sales companies. Compliance is monitored on meeting energy efficiency and metering obligations as well as scheduled audits (Article 13-Penalties).
135 Sachs Vanderbilt Law Review 2012, p.1639.
136 Economidou et al. 2016, p.12.
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3.2.5 EED challenges and opportunities
The EED is crucial for achieving energy efficiency goals and targets in the EU although there are still major challenges to be overcome. In 2015, the Commission report on the implementation of the EED heavily criticises the insufficient implementation of both the EED and the related EPBD, and calls on both Member States and the Commission to improve implementation and enforcement.137 Despite setting out ambitious goals, the directive has been criticized for following the policy objective of reaching indicative national targets138 for Member States rather than the binding targets.139 Specific Member States binding targets that promote energy efficiency improvements is preferred to indicative targets,140 however, the failure to focus on binding targets reflects the Council’s relaxed position in accepting ‘binding terms’ and to ensure that Member States are not overburdened.141 Indicative targets are criticized for not sharing the same guarantees of compliance as the binding ones, and they appear problematic to enforce.142 According to the Commission’s 29th Annual Report, obligations to submit plans and to reach binding targets are quite often neglected, and the infringement procedure is an insufficient deterrent for Member States to avoid non-compliance.143
Efforts to repeal the EED to adapt the directive to meet EU climate and energy targets for 2030 and align it with other aspects of the Clean Energy package144 have been pursued since November 2016. The revised EED has an upgraded binding target to achieve 30% energy consumption
137 europarl.europa.eu/legislative-train Section Energy efficiency directive review.
138 EED Article 3. It requires Member States to set ‘indicative’ national targets taking into account, the 20% energy efficiency improvement by 2020 and national circumstances.
139 Schiavo Maastricht J. Eur. & Comp 2013, p.325.
140 Directive 2012/27/EU Article 3.
141 Schiavo Maastricht J. Eur. & Comp 2013, p.321.
142Schiavo Maastricht J. Eur. & Comp 2013, p.325.
143COM/2012/0714 final.
144 The Commission’s main objective is to align the Directive with the revised EPBD, a recast Directive on the Promotion of Renewable Energy Sources, and a new regulation on Governance of Energy Union. See, europarl.europa.eu/legislative-train Section Energy efficiency directive review.
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reduction by 2030 beyond the 27% indicative target.145 The updated EED will ensure Member States upgrade their smart meters to ensure that they are read remotely. This applies to all energy installations and district heating, cooling and domestic hot water thus leading to greater transparency in billing information. A firm commitment to renovations to be counted towards compliance with the mandate for additional savings under an efficiency obligation is incorporated into the proposed amendments.146 As discussed above, the EED is therefore an important one piece of the EU energy and climate change mitigation puzzle but standing alone it will likely not reduce EU energy demand, reduce GHG emissions and curb climate change.